Elizabeth Company reported the following amounts in the equity section of its December 31, 2015, statement of financial position.

During 2016, Elizabeth took part in the following transactions concerning equity.
1. Paid the annual 2015 $8 per share dividend on preference shares and a $2 per share dividend on ordinary shares. These dividends had been declared on December 31, 2015.
2. Purchased 2,700 shares of its own outstanding ordinary shares for $40 per share. Elizabeth uses the cost method.
3. Reissued 700 treasury shares for land valued at $30,000.
4. Issued 500 preference shares at $105 per share.
5. Declared a 10% share dividend on the outstanding ordinary shares when the shares are selling for $45 per share.
6. Issued the share dividend.
7. Declared the annual 2016 $8 per share dividend on preference shares and the $2 per share dividend on ordinary shares. These dividends are payable in 2017.
Instructions

(a) Prepare journal entries to record the transactions described above.

(b) Prepare the December 31, 2016, equity section of the statement of financial position. Assume 2016 net income was $330,000.

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Share capital-preference, 8%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000 Share capital-ordinary, $5 par (100,000 shares authorized, 20,000 shares issued) 100,000 Share premium-preference 125,000 Retained earnings 450,000 Total $875,000